A bit of perspective please!
The below is a headline from the ABC online site on the 30th June 2022.
The underlying article went on to say;
“the single-strategy, default workplace superannuation products are even expected to deliver a median loss of 2.8 per cent to fund members for the 2021-22 financial year”
Now I’m not disputing what they say, it is very likely that most people will experience a negative return on their super investment for the year to the end of June 2022. But really, is 2.8% a big loss? The simple and obvious answer is no.
Does anyone remember what the similar return was for the year ending June 2021? Or for that matter the associated headline, no me either. However, I’ve got the benefit of being fairly closely associated with the superannuation industry and can source these things when I think necessary, so for all our benefit, the answer was around 16 to 18%, depending on which index you want to use.
Oh and in case you’re wondering, the 5 year average, including this year, will be around 6%p.a. Which isn’t bad when inflation has been around 1 to 2% for a lot of that period. So before we all panic like the media want us to, and think the Superannuation system is broken, how about we pause for a moment and use a bit of perspective. It will allow you to sleep a lot easier this weekend.
Looking forward, we can expect the current volatility to continue for a little while, while the battle between lowering inflation and not stifling the economy continues. However, try and remember to take most media articles/headlines with a grain of salt.
If you’re nervous or need clarity, seek professional advice, not media hyperbole.